Public Citizen has long fought big corporations who interfere with free speech on the Internet. Most recently, we have come to the aid of small online merchants who are blocked by big companies from fairly competing in the online marketplace on sites like eBay.com.
One of the many advantages of the Internet for consumers is the competition it creates. When Internet shoppers can easily compare the prices of hundreds of dealers online, it is difficult for any one dealer to get away with charging more. Thus, prices fall and consumers benefit.
Not surprisingly, however, some companies don’t like their prices being undercut on the Internet and have devised a variety of strategies to squelch unwanted competition. One common strategy is to use the provisions of the Digital Millennium Copyright Act of 1998 (DMCA) to interfere with legitimate competitors. eBay implements the DMCA through its "Verified Rights Owners" (or VeRO) program. Although the program is designed to allow intellectual property owners to assert legitimate claims against sellers of counterfeit merchandise, corporations sometimes exploit the program to curtail unwanted competition by small online retailers.
Abusive DMCA claims threaten the First Amendment right of online merchants to truthfully advertise their goods, and ultimately hurt all consumers by reducing the availability of cheaper generic products. Repeated wrongful claims can also lead to the termination of a seller’s eBay account. For small online merchants who depend on the Internet to make their living, this kind of termination is the equivalent of them showing up at their stores to find all their goods out on the curb. And without the resources to fight back in court, these small online sellers usually have no way to dispute the company’s claims.
In 2006, Public Citizen achieved two important settlement victories on behalf of eBay sellers. We defended and obtained a favorable settlement on behalf of Florida resident Brian Kopp, who was blocked from selling his independent video game guide on eBay by the game’s manufacturer. We also obtained a settlement on behalf of Florida resident Rip Mohl, recognizing his right to truthfully tell customers that his products are compatible with Dymo-brand printers and compensating him for lost sales caused by wrongful interference by the printer manufacturer.
Currently, we are appealing the decision of a federal court in Denver dismissing an eBay seller’s claim that a company wrongfully interfered with her sales. The court held that the eBay seller would have to go to New York, where the company’s headquarters are located, to defend her right to sell her products. On appeal, Public Citizen will argue that the court’s decision makes it practically impossible for small eBay sellers to contest corporate abuse.
Public Citizen will continue to level the playing field by fighting abusive practices of corporations and protecting open competition on the Internet.